Man sentenced for embezzling from SSA employees association

Apr. 3, 2013 - 01:43PM
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A retired Social Security Administration manager was sentenced to 15 months in prison Wednesday after pleading guilty to embezzling more than $400,000 from an SSA employees association.

Salvatore Petti, 76, will also have to spend three years on supervised release and pay some $570,500 in restitution, under the sentence from U.S. District Judge J. Frederick Motz in Baltimore. The Baltimore U.S. attorney’s office, which prosecuted the case, announced the sentence in a news release.

Petti, who worked for the Social Security Administration for more than 40 years, retired in 1995 as a GS-15 district director. But he continued to serve as treasurer of the Employees Activities Association, a private organization based at SSA’s Baltimore-area headquarters that ran a day-care center and provided other services to members, according to court filings.

For Petti’s work as treasurer, the association paid him about $60,000 per year from 2005 to 2008, according to the release. But in the course of an audit started in 2009, the SSA inspector general found that Petti had not reported any association income to the IRS for several years. The next year, Petti filed amended tax returns that included the income, but were padded with false expenses for travel, supplies and utilities, the release said. He was also stealing money from the association by writing himself checks for administrative and general expenses, according to the release.

In a December plea agreement on wire fraud and tax evasion charges, Petti admitted to spending some $430,000 in association funds at Atlantic City casinos from 2005 to 2010 and acknowledged failing to pay federal income taxes on some of the money. As part of the plea deal, he must pay almost $300,000 to the employees association and about $271,000 to the IRS. Petti’s lawyer, Caroline Ciraolo of Baltimore, could not immediately be reached for comment Wednesday.